Apple Watch Gets a Second Dip Into Customer’s Wallets

A research firm, Slice Intelligence, estimates Apple has sold 2.79 million Apple Watch as of mid- June. But according to data provided exclusively to Reuters, nearly 20% of Apple Watch buyers are not only shelling out hundreds of dollars for the watch but are springing for a spare band too. Apple may mine big profits from watch band, sales of the watch itself are just the beginning of Apple’s profits.

According to an analysis of a technology research firm, the costs of the entry-level sports band only about $2.05 to make, far less than the retails price for $49.But the estimates do not include expenses such as shipping and packaging etc.

We know that the razor-blade business model, in which a company sells a product for a modest price and then profits from sales of accessories, but, “Of course, because it’s Apple, it’s sell the razor, sell the blade,” analyst Kevin Keller of IHS joked.

“Apple needs to win the functional war, but they also have to win the fashion campaign and make it fun to wear,” the chairman of North America for LANDOR associates, Allen Adamson said, “Distinctive bands help customers match the watch to their outfits and lend the gadget a more personal feel, which is key to the appeal of wearable.” (Source: WWD)